A for sale sign for a home on Salisbury St. in SE Calgary, Alta. frames the city skyline on Wednesday December 10, 2014. House prices in Calgary are beginning to fall however experts are advising homeowners not to sell. Stuart Dryden/Calgary Sun/QMI Agency

Some bad and a bit of good this week.

The bad first.

Sales on Calgary’s MLS system in February were down 10 percent from February 2018, while the city-wide benchmark price declined five percent, year over year, to $414,400.

By category, the single-family benchmark price was $475,600, down five percent year over year, the apartment benchmark declined two percent to $252,300 and the attached home benchmark price hit $313,800, a year-over-year decline of 4.5 percent.

“It is not a surprise that slowing activity in the housing market has persisted into February,” said the Calgary Real Estate Board’s chief economist, Ann-Marie Lurie. “There has been no substantial change in the economic climate and concerns regarding potential layoffs in the energy sector are weighing on confidence.

“While the market remains oversupplied, slower sales and price declines do appear to be influencing sellers. New listings (in February) eased by eight percent compared to last year for a total of 2,211 units. However, the February sales were not enough to substantially impact inventories levels, which remain elevated at 5,885 units.”

It is very important home buyers and sellers have a firm grasp of market conditions, says Corinne Lyall of Royal LePage Benchmark in Calgary, saying if people don’t need to sell at this time, then don’t.

“No, they are just adding to an inventory that is already saturated in many areas,” says Lyall, adding if you do need to sell, get advice from a trusted source. “They should make sure they have a real estate professional who is confident in demonstrating not only what comparable homes have sold for, but has a marketing and analytical strategy to position their home to stand out among the competition. They should also consider staging to create the best first impression when it hits the market so potential buyers would consider a viewing appointment.”

Calgary is definitely a buyers’ market, says Lyall.

“There are good choices for buyers in this market,” she says. “It’s important to understand that waiting for prices to come down might also intersect at the same time as interest rates increasing. If you find the property you want to buy, don’t wait. We are in a great environment for buyers to take advantage of still low interest rates, and someone may like the same home as you and buy it while you are thinking about it.”

Now that bit of good as we head into the spring buying season.

“I imagine there will be some increase in listings and sales during this time, but we are still burdened with a higher inventory of listings already,” says Lyall. “There does seem to be already increased activity in some communities since the beginning of March. Agents are experiencing more buyers at their open houses, and multiple offers when there is a desirable property that is priced well.”

A bit of better good news about increasing interest in buying comes from Mark Herman, a broker with Mortgage Alliance in Calgary.

“We had the fifth busiest January and February in the last 15 years, so there is lots going on out there,” says Herman. “Fixed mortgage rates have come down almost half of a percent in 2019 so far and we see that slow slide backwards as continuing.

“The Bank of Canada’s overnight rate announcement last week affects variable rates, which are based on prime, and they’re not going to change for a while.” (See story on Page 6).

The mortgage originations are both renewals and new applications.

“The deals are pretty much even on renewals and new purchases that have been put off for a year or two,” says Herman. “It’s possibly due to latent demand, new buyers taking advantage of the low condo prices and new buyers skipping the starter home and going to the mid-level home due to the lower prices and higher inventory of these homes.”

The range of mortgages being written by Herman and his firm ranges from $120,000 to as high as $650,000, with about a 50-50 split between downpayments of five percent and 20 percent.

Herman doesn’t think speculators are going back into the market.

“Not at all,” he says. “Many we speak to are stuck with one flip that they are losing money on. Some lenders that do these are also stuck and losing funds due to the decreases.

“Even longer term ‘buy it, live in it, fix it and sell it in two-or-three-years’ types are stuck as the home is now worth what they paid for it, but they have put $20 to $40,000 worth of materials and their own time and labour for improvements.”

All applicants have passed the stress test.

“We are usually involved in advance of the purchase, so they know what their maximum is before they go shopping, so they would not have failed the stress test, but now they can only buy for less than they wanted to,” says Herman. “The question for us would be, what percentage of people buy right up to their maximum ratios allowed? And that would be 40 percent are right up to their maximum, 30 percent buy for significantly less, like half of what their max would be, and 30 percent buy what they had in mind from when they started looking.”

So, there you have it. Some not so good and perhaps, a bit of light at the end of the tunnel.

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